What does the new world mean for retirement?

As the Covid-19 pandemic eases in the UK we need to look forward and plan for the future. Two things are important to understand. The virus has not been eradicated in the UK, it has been reduced down to manageable levels. Globally it is rampant - look at the new infections in USA, Latin America, and Iran.

We live in a globalised economy. Whatever happens elsewhere in the world impacts to some degree on the UK. It is similar to the butterfly flapping its wings in one part of the world triggering a hurricane or typhoon several thousand miles away. We do not know which small events will have major impacts elsewhere.

Many use the image of cruises as a vision of retirement. At the beginning of March, I was in the Dominican Republic which had only one reported case of the virus. A cruise ship wanted to dock, to let off passengers and take on new passengers. There had been illness on the ship and therefore the local authorities would not let it dock.

There followed a game of back and forth between tour operators who needed to get the disembarking passengers off the ship and onto the remaining part of their holidays or home, and the embarking passengers on at a point where the ship was able to dock.

A small outbreak of illness caused inconvenience to many more. Cruising is an image of retirement in the new world but what will it be like in future? Will cruises have to become more localised with crew and passengers being restricted to fewer countries?

The virus has had a huge impact on many lives. We will never know the true number of deaths actually caused directly or indirectly by the virus. What we do know is that the majority of the 65,000 excess deaths the UK has experienced were Covid-related. Some commentators say these people were old and because they had existing conditions they would have died anyway. Actuarially many would have lived for another 10 years on average, also the proportionate increase in deaths among males over 40 years old is worrying.

Every death is a butterfly flapping their wings - we do not know what massive contribution the individual may have made to their family and community over the coming years. That, along with the gap they have left in their family and community, is what has been lost.

For every person that has died, possibly two have suffered a life-threatening experience and survived. They may have been discharged from hospital but they are in need of a long period of recuperation. Many will have lasting damage to their lungs, heart or other organs.

There are also reports from around the world of those who have had the illness, but not seriously enough to require hospitalisation, suffering from fatigue many months after the original symptoms. Further investigation is showing they also have various degrees of long-term illnesses.

The indications are that short of culling the weakest among the population, the illness may have weakened many more. This will have implications for future health and care provision.

On the one hand there are those who say everybody should go back to their pre-pandemic lives. The risk of catching and dying from the disease are now so small it can be ignored they say. On the other hand there are many scared people. Local flare-ups and localised lockdowns will not help these people.

Until a vaccine is found the only way to reduce the risk of catching the virus is to follow the safety-first hygiene guidance. This means that for many there is no going back to the pre-pandemic normal.

Early indications are that if we are lucky, we could have a vaccine in the UK in October. We could then be well into Spring 2021 before life could return to a near normal in the UK. ‘In the UK’ is an important phrase because, as I have said, we live in a global economy.

What impact has the virus had on family finances and plans. Some are better off because of their inability to spend. They may now feel confident to go ahead with a major project e.g. landscape the garden or extend the house. Others may have received unexpected inheritances.

On the other hand, there will be those who due to interest rates, investment markets and reduced employment opportunities will have their retirement plans thrown off kilter. Others may be in need of care and support or need to care for and support a family member.

Generally, we may get back to a near normal over the coming months, but many habits acquired during the crisis may continue long after. However, for many individuals there will be no going back. They will have to face the future from where they are today. As a later life adviser do you know how each of your clients has been affected, and what they now need from you? It should be time to find out and provide the advice they need now and for the future.